In 1999, the IIA of IL was successful in passing legislation that allowed the association to provide our members with the required producer bond and agency bond.
The State of Illinois, Department of Insurance, requires a bond if the producer does not have a direct contract with the insurer. The Illinois Department of Insurance is the obligee for the bond as provided for in the Illinois Insurance Statutes.
The amount required by statute is $2,500 or 5% of the premiums brokered in the previous calendar year, whichever is greater, but not to exceed $50,000 total aggregate liability. Since our program covers both the producer and the agency for the total of $50,000, there is no need to compute what 5% of the previous year’s premiums are.
This is not fidelity coverage. A fidelity bond would provide coverage for employee theft of the agency’s and/or insured’s money. Sometimes limited coverage may also be found in the agency’s business owners policy or errors and omissions policy.
The cost for the producer’s bond is extremely low - only $15 per licensee and NO CHARGE for the agency if all licensees in the agency are covered on January 1 each year. Since the agency only needs to report their licensees just once a year, there will be no additional or return premiums made during the year. New licensees are automatically covered as long as the agency reported and paid for all licensees in the agency on January 1.
To sign up for the bond program, a IIA of IL member agency simply needs to fill out the producer bond form listing each of your producer's names and social security numbers, and include a check for $15 per producer, and mail to:
IIA of IL
4360 Wabash Avenue
Springfield, IL 62711
(800) 628-6436, ext. 3006
Click here for a copy of the producer bond form.
The Illinois Department of insurance no longer requires you to submit a copy of your bond with your license renewal. Therefore, a copy of the bond will not be sent to you (copy can be obtained as explained below). IIA of IL retains the master bond at its office.
Click here to view a copy of the bond.